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2018 will be the year for first home buyers in Western Australia according to Shane Kempton,Chief Operations Officer of Professionals Real Estate Group in WA and the Northern Territory.
Mr Kempton said that a trifecta of record low interest rates, improving economic conditions and very affordable property prices would result in a surge of first home buyer activity in Perth and throughout WA during 2018.
“The reality is that first home buyers can now buy an established home in Perth for the same price or even less than a decade ago.
“A good example is Armadale, which is is one of the most affordable suburbs in Perth to buy a home. Ten years ago, the median price of a home in Armadale was $302,250 and today is it $265,000.
“So over the past ten years, the median price of a home in Armadale has fallen by 12.3% or nearly $40,000 which represents a huge savings for potential first home buyers.
“Armadale, is just one of many affordable suburbs in Perth where first home buyers can now take advantage of record low interest rates to get into the property market.
“Tuart Hill which is 10minutes from the CBD has Villa’s under $300,000. It worth doing the research and finding some of these hidden gems in great locations.
“Professionals has already recorded a jump in activity by first home buyers in these affordable suburbs during the second half of 2017 and we expect this trend to gain further momentum during 2018.
“The property market is based on confidence and more first home buyers are now deciding to buy because of improving conditions in the Western Australia economy.
“Astute first home buyers are also recognising that property prices are unlikely to get any cheaper and they are deciding to purchase a home now before prices start to rise after the property market moves into recovery mode.
“Professionals is predicting that Perth suburbs with a median house of $350,000 should perform very strongly during 2018 due to greater activity by first home buyers in the property market. Suburbs in this price range include Midland ($350,000), Maddington ($320,000), Seville Grove ($336,000), Gosnells ($329,000), Camillo ($298,000),Leda ($324,900) and Medina ($280,000),” he said.
TIPS FOR BUYING A FIRST HOME
* Do not make an emotional decision when buying your first home. Many first home buyers make the mistake of buying a home they ‘fall in love with’ rather than taking into account whether they can financially afford it over the long term or how much the property will be worth in five years’ time.
* Look at a wide geographic area when searching for your first home. Many first home buyers make the mistake of buying their first home within 15 kilometres of their current address and therefore over look homes that may offer better value in other areas.
* Future capital growth potential should be a key consideration when selecting your first home because you want to buy a property that will outperform the rest of the market and deliver you the wealth creation to upgrade to a better located property.
* Beware of buying into a location where there might be an oversupply of homes. For example, the inner city apartment market is now in danger of becoming oversupplied and this could drive down prices.
* Consider the land content of the property rather than the structure of the home. It is important to remember that land appreciates in value and buildings depreciate in value. A property which has a land content of more than 75% has a greater chance of appreciating at a higher rate than a property where most of the value is in the building.